Even though non-interest expenses on physical capital and labor comprise at least 40 percent of banks’ total costs, much of the banking literature entirely ignores real resource costs. This paper shows that whenever banks realize economies of scope in the use of resources, banks’ balance-sheet choices are inextricably linked to their decisions regarding employment of capital and labor and demonstrates that the intensity of capital utilization must be systematically related to the loan-deposit ratio. Based on U.S. banking data, we provide empirical evidence supporting this prediction

Dia, E., Vanhoose, D. (2019). Real resource utilization in banking, economies of scope, and the relationship between retail loans and deposits. ECONOMICS LETTERS, 177, 39-42 [10.1016/j.econlet.2019.01.018].

Real resource utilization in banking, economies of scope, and the relationship between retail loans and deposits

Dia, E;
2019

Abstract

Even though non-interest expenses on physical capital and labor comprise at least 40 percent of banks’ total costs, much of the banking literature entirely ignores real resource costs. This paper shows that whenever banks realize economies of scope in the use of resources, banks’ balance-sheet choices are inextricably linked to their decisions regarding employment of capital and labor and demonstrates that the intensity of capital utilization must be systematically related to the loan-deposit ratio. Based on U.S. banking data, we provide empirical evidence supporting this prediction
Articolo in rivista - Articolo scientifico
Bank loan-deposit ratio, Bank physical capital intensity, Economies of scope
English
2019
177
39
42
none
Dia, E., Vanhoose, D. (2019). Real resource utilization in banking, economies of scope, and the relationship between retail loans and deposits. ECONOMICS LETTERS, 177, 39-42 [10.1016/j.econlet.2019.01.018].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/218335
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